Fixed Income Daily Market Update

CMBI Credit Commentary Fixed Income Daily Market Update固定收益部市场日报 ThenewKOMRMR 31 tightened 10bps from RO at T+100 this morning,whilethe new HYNMTR 28-31s were largely unchanged from ROs.ZHOSHK 28 edged0.3pt higher amid better buying. The rest of Asian IGspace traded 3-5bps tighter overall. AMs continued to buy front-end perps.GLPSP 28/GLPCHI 29 rose 1.1-1.3pts. Glenn Ko, CFA高志和(852) 3657 6235glennko@cmbi.com.hk FTLNHD/FUTLAN:An outperformer in a challenging operating environment.See below. Cyrena Ng, CPA吳蒨瑩(852) 3900 0801cyrenang@cmbi.com.hk ChinaEconomy:PMI notably beat market expectation. CMBI revised Q1GDP forecast to 4.8% from 4.5%, mainly driven by expanding trade surplus;rising price level may push the PBOC rate cut from 2Q26 to 3Q26. See thecomments from CMBI economic research below. Yujing Zhang张钰婧(852)3900 0830zhangyujing@cmbi.com.hk Trading desk comments交易台市场观点 Yesterday,Yankee AT1s and insurance subs recovered by up to 1.3pts.Asian AMs added 2-to-5yr-to-call Yankee AT1 issues, and some tacticalinvestors bought higher risk, 10yr-to-call papers. LLOYDS 6.625 Perp/HSBC7 Perp/BNP 6.875 Perp were 1.1-1.3pts firmer. In Chinese higher-beta space,EHICAR 26-27 were unchanged to 0.1pt higher. EHi extended the exchangeexpiration date to 9 Apr’26 from 30 Mar’26 for EHICAR 26. FOSUNI 26-29edged 0.1-0.3pt higher. Fosun launched a tender offer for outstandingFOSUNI 5 05/18/26 at par, to be funded with internal resources. See ourcomments on EHi andFosunyesterday. InChinese properties, ROADKGPerps dropped 1.1-1.2pts. Road King’s loss for FY25 deteriorated 60% yoyto RMB5.3bn. VNKRLE 27’ and 29’ retraced 0.3-0.8pt. FUTLAN 28/FTLNHD26-29 were 0.2pt lower to 1.0pt higher. See our comments on Seazen’s FY25resultsbelow.In Chinese IG space,KUAISH/MEITUA closed largelyunchanged amid two-way flows. ZHOSHK 28 recovered 0.5pt with RMbuying. See our comments on the silver linings ofZhongsheng’s weak FY25results. In HK space, we saw better selling on bank T2s BNKEA/NANYAN.In KR space, dip buyers emerged to pick up front-end, 26-29s corporatepaperslike HYNMTR/LGENSO/SKBTAM,but the space closed largelyunchanged. In JP space, we saw better selling on bank FRNs whilst betterbuying on 10yr duration bank papers SUMI/MUFG. RAKUTN 27 gained 0.3ptamid mixed flows from non-Japanese Asian AMs and prop investors. In SEAsian space, we saw better buying on OCBCSP 35-36 while better selling onBBLTB/KBANK from PBs and RMs. VEDLN 28-33s were up by 0.2-1.0pt.Vedanta Limited further extended the deadline for its proposed demerger by3 months to 30 Jun’26 as it awaits government approvals. LGFV names hada quiet session amid light flows. Last Trading Day’s Top Movers Marco News Recap宏观新闻回顾 Macro–S&P (+2.91%), Dow (+2.49%) and Nasdaq (+3.83%) werehigheron Tuesday. US Mar’26 CB ConsumerConfidence was 91.8, higher than the market expectation of 87.8. US Feb’26 JOLTS Job Openings was6.882mn,lower than the market expectation of 6.890mn. UST yield was lower on Tuesday. 2/5/10/30 year yield was at3.79%/3.92%/4.30%/4.88%. Desk Analyst Comments分析员市场观点 FTLNHD/FUTLAN:An outperformer in a challenging operating environment Maintain buy on FUTLAN/FTLNHDs We maintain buy on FUTLAN/FTLNHDs in view of the bonds’ good risk and return profiles, especially afterSeazen demonstrated once again its good access to various funding channels.We consider Seazen one ofthe very few stand-outs among non-state-owned Chinese property developers in term of operating performanceand access to capital markets.Its resilience has been supported by the growing recurring income from its highquality (i.e. high occupancy rate, 97.8% in Dec’25) investment properties (IPs). Clickherefor the full report. China Economy:PMI notably beat market expectation China’s manufacturing PMI sharply rebounded in Marpartly distorted by the later and longer CNY holiday in2026, as the 3M MA remained in contraction. Demand and production both improved, while inventory cycle,and export and import orders recovered. Deflation pressure notably eased as raw materials purchase price andex-factory price rose to 5-year highs, driven by surging energy prices. Non-manufacturing PMI edged up, withservices back in expansion while construction remained in contraction. Price indexes of both manufacturingand service sectors indicated the cost-push reflation may lead to a positive PPI in upcoming months, supportinga rebound in industrial profits particularly in upstream sectors. However, downstream firms’ pricing power remains limited and margin pressure may persist as final consumer demand remains soft. In our view, the risingprice level does not mean a broad-based recovery in domestic demand or a clear end to China’s deflation cycleyet, but it does mark an encouraging first step towards reflation. We are revising Q1 GDP forecastto 4.8% from4.5%, mainly driven by expanding trade surplus. Rising price level may push the PBOC rate cut from 2Q26 to3Q26, in our view. Manufacturing PMI notably rebounde